Correlation Between Hemisphere Energy and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and USWE SPORTS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hemisphere Energy and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy Corp and USWE SPORTS AB, you can compare the effects of market volatilities on Hemisphere Energy and USWE SPORTS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hemisphere Energy with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and USWE SPORTS.
Diversification Opportunities for Hemisphere Energy and USWE SPORTS
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hemisphere and USWE is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy Corp and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB and Hemisphere Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hemisphere Energy Corp are associated (or correlated) with USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and USWE SPORTS go up and down completely randomly.
Pair Corralation between Hemisphere Energy and USWE SPORTS
Assuming the 90 days trading horizon Hemisphere Energy Corp is expected to generate 0.49 times more return on investment than USWE SPORTS. However, Hemisphere Energy Corp is 2.06 times less risky than USWE SPORTS. It trades about 0.05 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.0 per unit of risk. If you would invest 110.00 in Hemisphere Energy Corp on October 25, 2024 and sell it today you would earn a total of 10.00 from holding Hemisphere Energy Corp or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hemisphere Energy Corp vs. USWE SPORTS AB
Performance |
| Timeline |
| Hemisphere Energy Corp |
| USWE SPORTS AB |
Hemisphere Energy and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and USWE SPORTS
The main advantage of trading using opposite Hemisphere Energy and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, USWE SPORTS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| Hemisphere Energy vs. Minerals Technologies | Hemisphere Energy vs. Dairy Farm International | Hemisphere Energy vs. GLG LIFE TECH | Hemisphere Energy vs. ALEFARM BREWING DK 05 |
| USWE SPORTS vs. Costco Wholesale Corp | USWE SPORTS vs. COSTCO WHOLESALE CDR | USWE SPORTS vs. SPARTAN STORES | USWE SPORTS vs. National Retail Properties |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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